Brad's Brief - NFTs, Nifties, NBA TopShot, Nifty Gateway, Beeple, NFTs, and more NFTs
Hey everyone,
One of the biggest trends so far in 2021 has been the rise of NFTs. It seems like everyone is talking about them. From Mark Cuban to Logan Paul to Gary V, they are everywhere. But what is an NFT? Are they worth investing in? Or are they worthless? In this week's Brief, we will dive deep into the world of NFTs to get a better understanding of what's going on and hopefully answer those questions along the way.
Before we get in to the normal Brief, let’s start with some background on NFTs.
What is an NFT?
NFTs, or non-fungible tokens, are a new type of digital asset. Ownership of these assets are recorded on a blockchain, most commonly Ethereum.
Think of an NFT as a digital baseball card. You collect and trade them like baseball cards, but they can represent anything digital, including art, videos, music, gifs, games, text, memes, or code.
Per Wikipedia:
A non-fungible token (NFT) is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not mutually interchangeable. This is in contrast to cryptocurrencies like bitcoin, and many network or utility tokens that are fungible in nature. Non-fungible tokens are used to create verifiable digital scarcity, as well as digital ownership, and the possibility of asset interoperability across multiple platforms.
Each NFT contains information on the history and origin of that media. NFT's can also be programmed. One popular feature is to ensure that the original creator receives royalties from any subsequent sale of the NFT.
The most popular NFT's to date have been related to art and videos. For example, this NFT by Beeple resold for $6.6 million on February 24.
Where can I buy NFTs?
Some of the top NFT marketplaces are NBA TopShot, OpenSea, CryptoPunks, Rarible, and SuperRare. Nifty Gateway has also been a top source for new NFT art drops.
NBA TopShot is officially licensed by the NBA and allows users to buy, sell and trade NBA highlights.
OpenSea is a marketplace for digital goods, including collectibles, gaming items, digital art, and other digital assets that are backed by a blockchain like Ethereum. On OpenSea, you can buy, sell, and trade any of these items with anyone in the world.
The CryptoPunks are 10,000 uniquely generated characters. No two are exactly alike, and each one of them can be officially owned by a single person on the Ethereum blockchain.
Rarible is the first community-owned NFT marketplace. You can create, sell or collect digital items.
Sorare is a fantasy game of soccer, where players buy, sell, trade, and manage a virtual team with digital player cards.
Nifty Gateway teams up with Top artists and brands to create collections of limited edition, high quality Nifties, exclusively available on our platform. Each collection will be opened at a specific time (a drop), and will only be available for a limited time. Nifty Gateway is also a centralized, USD based marketplace for buying and selling Nifties.
All of the marketplaces above utilize the the Ethereum blockchain except for NBA TopShot which sits on a custom blockchain called Flow. Each has varying levels of complexity to use, but if you are familiar with MetaMask, you should have no problem using any of these sites.
Are they valuable?
Yes, but I think the prices will be highly volatile in the short term. There has been an influx of money into the space in the past few weeks, so there will likely be some NFTs that are being wildly overpriced. That said, there is likely still a ton of money to be made buying drops and reselling. If you decide to start collecting, do your own research and make sure you are buying something that you love, because you might need to hang on to it for a while to realize the value.
Hopefully this gives us enough of a baseline to get into the Brief for this week below. Let me know if you own any NFTs or decide to buy any in the future!
Brad
What I'm reading
NFTs make the internet ownable
Tokens and smart contracts have been called "money legos" as they allow programmers to compose and remix DeFi applications. Similarly, NFTs are "media legos" for developers and creators to permissionlessly remix and build new experiences around. As a result, users can look forward to richer experiences, and compounding utility around the items they own.
In my research, this article from Jesse Walden was the most cited by other credible sources, so it felt like a logical place to start. Jesse lays out a thesis that all future media will start as NFTs, because they benefit everyone involved, from the creator, to the consumer, to the developer. Ownership is power, and right now, everyone that posts on social media or puts their work out on the internet is effectively giving up ownership.
NFTs change this completely. They have the potential to invert the ownership model of media—offering creators, their audiences, and developers who build for them, a viable alternative to platform-driven monetization. This is a must read.
NFTs and a Thousand True Fans
Crypto, and specifically NFTs (non-fungible tokens), can accelerate the trend of creators monetizing directly with their fans. Social platforms will continue to be useful for building audiences (although these too should probably be replaced with superior decentralized alternatives), but creators can increasingly rely on other methods including NFTs and crypto-enabled economies to make money.
Andreeson Horowitz is consistently at the forefront of revolutionary technologies and NFTs are no different. In this article, A16Z partner Chris Dixon lays out three important reasons why NFTs offer fundamentally better economics for creators:
Removing rent-seeking intermediaries
Enabling granular price tiering
Making users owners, thereby reducing customer acquisition costs to near zero
What I'm listening to
NFTs Explained: How Digital Art is Being Sold for Millions and What the Opportunities Are
I recently discovered Sam Parr and Shaan Puri's podcast, "My First Million" and have been binging their backlog of episodes. These guys are super sharp and are very transparent about the way they think about new opportunities and businesses. I highly recommend you checking it out.
They just did this show where they discussed NFTs. At about the 18:15 mark, Shaan does a great job of explaining NFTs, what it;’s like to actually own them and flip them for 10x gains.
Why DeFi is the Future | Mark Cuban | Bankless
This title of this episode is deceiving. It’s not just about DeFi. Mark goes into a lot of detail about NFTs and his ideas around the space. My big takeaway is that Cuban is ALL IN. One of his ideas is to make Dallas Mavericks tickets NFTs, which would allow them to take a cut of all the resales of a ticket.
NBA Topshot, DUST & The Bitcoin Collection | The Nifty Show
Alan Carr from Dapper Labs (the creators of CryptoKitties and NBA Top Shot) was on The Nifty Show talking about the massive growth they have seen in the past few weeks. You could almost hear the stress in his voice from trying to keep up with the demand for the product. 🚀
This podcast is a good subsribe if you are trying to go deep into the NFT rabbit hole.
Bonus: NFT MANIA! Are NFTs the Future of Art? | Bankless
I am including a second episode of the Bankless podcast as a bonus because I couldn’t choose between this episode and the one with Mark Cuban.
This is an interview with the founders of Nifty Gateway. They are one of the hottest platforms in the space and host daily drops from popular artists. For example, the Beeple drop referenced in the intro.
Interestingly, the founders of Nifty Gateway are twins and they sold their company to Gemini, which was also founded by twins—Cameron and Tyler Winklevoss.
What I'm watching
The Video That Will Get You To Start Your NFT Journey
If you want to hype yourself up to start collecting NFTs, watch this. Gary V is the ultimate hype man and he is deep in the NFT game. This is a good compilation of what he’s been talking about for the last few months.
Tweets of the Week
This is a great tweet that goes into the nuance around the value of NFT's. Are they valuable or are they worthless? Probably somewhere in between.
I had to include two this week because Tom does a killer job of illustrating the problem that NFTs are solving.
Thanks for reading!
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